IDBI EQUITY ADVANTAGE FUND (An open-ended Equity Linked Savings Scheme with a statutory lock in of 3 years and tax benefit)

Transcription

1 SCHEME INFORMATION DOCUMENT IDBI EQUITY ADVANTAGE FUND (An open-ended Equity Linked Savings Scheme with a statutory lock in of 3 years and tax benefit) Long term capital growth This product is suitable for investors who are seeking*: An Equity Linked Savings Scheme (ELSS) investing in equity and equity related instruments with the objective to provide investors with opportunities for capital appreciation and income along with the benefit of income-tax deduction (under section 80C of the Income-tax Act, 1961) on their investments, subject to a statutory lock-in of three years. *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. Continuous offer for Units at NAV related prices Name of Mutual Fund : IDBI Mutual Fund Name of Asset Management Company : IDBI Asset Management Limited (CIN:U65100MH2010PLC199319) Name of Trustee Company : IDBI MF Trustee Company Limited (CIN: U65991MH2010PLC199326) Address Registered Office : IDBI Tower, WTC Complex, Cuffe Parade, Colaba, Mumbai Corporate Office : 5th Floor, Mafatlal Centre, Nariman Point, Mumbai Website : The particulars of the Scheme have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations 1996, (hereinafter referred to as SEBI (MF) Regulations as amended till date, and filed with SEBI, along with a Due Diligence Certificate from the AMC. The units being offered for public subscription have not been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy of the Scheme Information Document. The Scheme Information Document (SID) sets forth concisely the information about the scheme that a prospective investor ought to know before investing. Before investing, investors should also ascertain about any further changes to this Scheme Information Document after the date of this Document from the Mutual Fund / Investor Service Centres / Website / Distributors or Brokers. The investors are advised to refer to the Statement of Additional Information (SAI) for details of IDBI Mutual Fund, Tax and Legal issues and general information on SAI is incorporated by reference (is legally a part of the Scheme Information Document). For a free copy of the current SAI, please contact your nearest Investor Service Centre or log on to our website. The Scheme Information Document should be read in conjunction with the SAI and not in isolation. This Scheme Information Document is dated June 30, 2018 Interpretation For all purposes of the SID, except as otherwise expressly provided or unless the context otherwise requires: All references to the masculine shall include the feminine and all references, to the singular shall include the plural and vice-versa. All references to "Rs" refer to Indian Rupees. A "crore" means "ten million" and a "lakh" means a "hundred thousand". All references to timings relate to Indian Standard Time (IST). References to a day are to a calendar day including non Business Day unless otherwise specified.

2 EQUITY LINKED SAVINGS SCHEME, 2005 Notification No. 226/2005, dated In exercise of the powers conferred by clause (xiii) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following scheme, namely: Short title and commencement 1. (1) This scheme may be called the Equity Linked Savings Scheme, (2) It shall come into force on the date of its publication in the Official Gazette. Definitions 2. In this scheme, unless the context otherwise requires : (a) Act means the Income-tax Act, 1961 (43 of 1961) (b) assessee means: (i) an individual; or (ii) a Hindu undivided family; or (iii) an association of persons or a body of individuals consisting, in either case, only of husband and wife governed by the system of community of property in force in the State of Goa and Union Territories of Dadra and Nagar Haveli and Daman and Diu by whom, or on whose behalf, investment is made; (c) investment means an investment in Units of the Unit Trust or a Mutual Fund by an assessee under a plan formulated in accordance with this scheme; (d) Mutual Fund means any Mutual Fund specified under clause (23D) of section 10 of the Act; (e) plan means any plan formulated in accordance with this scheme; (f) Unit Trust means the Administrator referred to in clause (a) or the specified company referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002); 1[(g) year means a year commencing from the date of allotment or holding of units, as the case may be, in the plan;] (h) words and expressions used herein and not defined shall have the meanings respectively, assigned to them in the Income-tax Act. Investment and Repurchase 3. (a) Amount to be invested in a plan of the Unit Trust or of a Mutual Fund shall be in multiples of Rs. 500 with a minimum of Rs (b) The Unit Trust or a Mutual Fund shall allot the units in respect of all complete applications, made in the form specified by that Trust or Fund, not later than on 31st March, every year. (c) The plan shall be open for a minimum period of one month during the financial year and a minimum period of three months during the subsequent years. 2

3 (d) Investment in the plan will have to be kept for a minimum period of three years from the date of allotment of units. After the said period of three years, the assessee shall have the option to tender the units to the Unit Trust or the Mutual Fund, for repurchase. (e) In the event of the death of the assessee, the nominee or legal heir, as the case may be, shall be able to withdraw the investment only after the completion of one year from the date of allotment of the units to the assessee or any time thereafter. Transferability 4. Units issued under the plan can be transferred, assigned or pledged after three years of its issue. 5. Investment of Equity Linked Saving Funds (a) The funds collected under a plan shall be invested in equities, cumulative convertible preference shares and fully convertible debentures and bonds of companies. Investment may also be made in partly convertible issues of debentures and bonds including those issued on rights basis subject to the condition that, as far as possible, the non-convertible portion of the debentures so acquired or subscribed, shall be disinvested within a period of twelve months. (b) It shall be ensured that funds of a plan shall remain invested to the extent of at least eighty per cent in securities specified in clause (a). The Unit Trust and Mutual Fund shall strive to invest their funds in the manner stated above within a period of six months from the date of closure of the plan in every year. In exceptional circumstances, this requirement may be dispensed with by the Unit Trust or the Fund, in order that the interests of the assessee are protected. (c) Pending investment of funds of a plan in the required manner, the Unit Trust and Mutual Fund may invest the funds in short-term money market instruments or other liquid instruments or both. After three years of the date of allotment of the units, the Unit Trust or Mutual Fund may hold up to twenty per cent of net assets of the plan in short-term money market instruments and other liquid instruments to enable them to redeem investment of those unit-holders who would seek to tender the units for repurchase. Repurchase price 6. (a) The Unit Trust and other Mutual Funds shall announce the repurchase price one year after the date of allotment of the units and thereafter on a half-yearly basis. (b) After a period of three years from the date of allotment of units, when the repurchase of units is to commence, the Trust and the Mutual Fund shall announce a repurchase price every month or as frequently as may be decided by them. (c) In calculating the repurchase price, the Unit Trust and the Mutual Fund shall take into account the unrealised appreciation in the value of the investment of the funds of a plan to the extent they deem fit provided that it shall not be less than fifty per cent of such unrealised appreciation. While calculating the repurchase price, the Unit Trust and Mutual Funds may deduct such sums as are appropriate to meet management, selling and other expenses including realisation of assets and such sums shall not exceed five per cent per annum of the average Net Asset Value of a plan. (d) Repurchase of units will be at the repurchase price prevailing on the date the units are tendered for repurchase. Evidence of Investment or Repurchase 7. The investment made in any plan by an assessee will be acknowledged by the Unit Trust and Mutual Fund by issue of certificate of investment or a statement of account as may be decided by them. 3

4 Termination of a Plan 8. (a) A plan operated by Unit Trust or a Mutual Fund would be terminated at the close of the 10th year from the year in which the allotment of units is made under the plan. (b) If ninety per cent or more of the units under any plan are repurchased before completion of ten years, the Unit Trust and Mutual Fund may at their discretion, terminate that plan even before the stipulated period of ten years; and redeem the outstanding units at the final repurchase price to be fixed by them. Open Ended Equity Linked Saving Plan 9. The Unit Trust or the Mutual Fund may at their discretion operate one Open Ended Equity Linked Saving Plan with the prior approval of the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992 (15 of 1992).]. Notification: No. SO 1563(E), dated , as amended by Notification No. 259/2005 [F.No. 142/39/2005-TPL], dated Clarification One The Equity Linked Savings Scheme, 2005 has been notified vide S.O. No. 1563(E), dated The Central Board of Direct Taxes has clarified that investments made on or after 1st April, 2005, in plans, which are in accordance with ELSS 1992 or ELSS 1992 as amended in 1998 are also eligible for tax benefit under section 80C of the Income-tax Act, Press release: Dated

5 Index A. RISK FACTORS... 8 B. REQUIREMENT OF MINIMUM INVESTORS IN THE SCHEME C. SPECIAL CONSIDERATIONS D. DEFINITIONS E. DUE DILIGENCE CERTIFICATE II. INFORMATION ABOUT THE SCHEME...18 A. TYPE OF THE SCHEME B. INVESTMENT OBJECTIVE OF THE SCHEME C. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? D. WHERE WILLTHE SCHEME INVEST? E. WHAT ARE THE INVESTMENT STRATEGIES? F. FUNDAMENTAL ATTRIBUTES G. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? J. HOW HAS THE SCHEME PERFORMED? K. SCHEME RELATED DISCLOSURE (In compliance to SEBI Circular dated March 18, 2016) III. UNITS AND OFFER...35 A. NEW FUND OFFER (NFO) - Not Applicable B. ONGOING OFFER DETAILS C. PERIODIC DISCLOSURES D. COMPUTATION OF NAV IV. FEES AND EXPENSES...75 A. NEW FUND OFFER (NFO) EXPENSES- Not Applicable B. ANNUAL SCHEME RECURRING EXPENSES C. LOAD STRUCTURE D. WAIVER OF LOAD FOR DIRECT APPLICATIONS - Not applicable E. TRANSACTION CHARGES V. RIGHTS OF UNITHOLDERS...80 VI. PENALTIES, PENDING LITIGATION OR PROCEEDINGS, FINDINGS OF INSPECTIONS OR INVESTIGATIONS FOR WHICH ACTION MAY HAVE BEEN TAKEN OR IS IN THE PROCESS OF BEING TAKEN BY ANY REGULATORY AUTHORITY

6 HIGHLIGHTS OF THE SCHEME 1. Name of the Scheme: IDBI Equity Advantage Fund 2. Type of Scheme: An open-ended Equity Linked Savings Scheme with a statutory lock in of 3 years and tax benefit. 3. Investment objective: The Scheme will seek to invest predominantly in a diversified portfolio of equity and equity related instruments with the objective to provide investors with opportunities for capital appreciation and income along with the benefit of income-tax deduction (under section 80C of the Income-tax Act, 1961) on their investments. Investments in this scheme would be subject to a statutory lock-in of 3 years from the date of allotment to be eligible for income-tax benefits under Section 80C. There can be no assurance that the investment objective under the scheme will be realized. 4. Liquidity The Scheme being offered is an open ended scheme and will offer units for sale/switch-in and redemption switch-out at NAV based prices on all business days. As per SEBI (MF) Regulations, the Mutual Fund shall dispatch redemption proceeds within 10 Business Days of receiving a valid Redemption request. A penal interest of 15% per annum or such other rate as may be prescribed by SEBI from time to time, will be paid in case the redemption proceeds are not made within 10 Business Days of the date of receipt of a valid redemption request. 5. Plans/ Options for investment The Scheme offers Regular Plan and Direct Plan for investment. Both Plans offer Growth Option and Dividend Option. Dividend Option offers facility for payout /sweep of dividend. 6. Benchmark S&P BSE 200 Total Return Index (TRI) Transparency/NAV Disclosure The AMC will calculate the NAV on all Business Days and disclosed the same on the website of IDBI Mutual Fund ( and on the website of Association of Mutual Funds in India - hereinafter referred to as AMFI ( by 9.00 p.m. on every Business Day. The investors will be able to view the NAV s from the AMC s website on the following link In case of any delay, the reasons for such delay would be explained to AMFI in writing. If the NAVs are not available before commencement of Business Hours on the following day due to any reason, the Mutual Fund shall issue a press release giving reasons and explaining when the Mutual Fund would be able to publish the NAVs. The Mutual Fund/ AMC shall extend facility of sending latest available NAVs to Unit holders through SMS, upon receiving a specific request in this regard. The Mutual fund/amc will disclose the portfolio of the Scheme (along with ISIN) as on the last day of the month/ half year for all their schemes in the format prescribed by SEBI on the website of IDBI Mutual Fund ( and on the website of Association of Mutual Funds in India - hereinafter referred to as AMFI ( within 10 days from the close of each month/ half year respectively in a user-friendly and downloadable spreadsheet format. The unitholder will be able to view and download monthly/ half yearly portfolio from the AMC s website on the following link In case of Unitholder whose addresses are registered, the Mutual Fund/ AMC shall send via both the monthly and halfyearly statement of scheme portfolio within 10 days from the close of each month/ half-year respectively. The Mutual Fund/ AMC shall publish an advertisement every half-year disclosing the hosting of the half-yearly statement of its schemes portfolio on its website and on the website of AMFI. Such 6

7 advertisement shall be published in the all India edition of at least two daily newspapers, one each in English and Hindi. Unitholder can submit the ( or written request) for a physical or electronic copy of the statement of scheme portfolio. The Mutual Fund/ AMC shall dispatch an account statement within 5 Business Days from the date of the receipt of request from the Unit holder. An Unitholder can also request for a physical or electronic copy of the statement of scheme portfolio through SMS, telephone, or through letter. The Mutual Funds/ AMC shall provide a physical copy of the statement of its scheme portfolio, without charging any cost, on specific request received from a Unitholder. 7. Loads Entry Load (for new purchases including SIP) Not applicable SEBI vide its circular no. SEBI/IMD/CIR No. 4/ /09 dated June 30, 2009 has decided that there shall be no entry Load for all Mutual Fund Schemes. The upfront commission, if any, to the distributor on the investment made by the investor will be paid by the investor directly to the distributor, based on his assessment of various factors including the service rendered by the distributor. Exit load- repurchase/switch-out/ Transfer/SWP) Nil. Repurchase, STP and SWP from the Scheme will be available only after completion of statutory lock-in period of 3 years. In the event of the death of the assessee, the nominee or legal heir, as the case may be, shall be able to withdraw the investment only after the completion of one year from the date of allotment of the units to the assessee or any time thereafter. The exit load will be applicable for both normal transactions and SIP transactions (to each installment). In case of SIP, the date of allotment for each installment for subscription will be reckoned for charging exit load on redemption. SEBI vide circular Ref no: CIR/IMD/DF/21/2012 dated September 13, 2012 and notification dated September 26, 2012 the exit load, if any, charged by mutual fund scheme (s) shall be credited to the respective scheme (s) after debiting applicable GST tax, if any. The exit load charged on redemption will be credited to the scheme on the next business day after debiting applicable GST tax. For further details on load structure refer to the section 'Load Structure' in the document. 10. Minimum Application Amount Minimum Application Amount Rs. 500 and in multiples of Re. 500 thereafter. Additional purchase Rs.500 and in multiples of Rs 500 therafter Systematic Investment Plan (SIP) o Monthly option - Rs. 500 per month for atleast 12 months or Rs per month for a minimum period of 6 months o Quarterly option - Rs per quarter for a minimum period of four quarters Investments above the minimum amount mentioned, shall be made in multiples of Rs.500 for all SIP irrespective of frequency of SIP or the Option. The minimum application amounts listed above does not apply in case of Transfers. 7

8 I. INTRODUCTION A. RISK FACTORS I. Standard Risk Factors: 1. Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal. 2. As the price / value / interest rates of the securities in which the scheme invests fluctuates, the value of your investment in the scheme may go up or down 3. Past performance of the Sponsor /AMC /Mutual Fund does not guarantee future performance of the scheme. 4. The name of the scheme does not in any manner indicate either the quality of the scheme or its future prospects and returns. 5. The Sponsor is not responsible for any loss or shortfall resulting from the operations of the scheme beyond the initial contribution of Rs. 10 lakhs made by it towards setting up the Fund and/or such other accretions / additions to the same made from time to time. 6. The present scheme offered by IDBI Mutual Fund is not a guaranteed or assured return scheme. II. Scheme Specific Risk Factors 1. The Trustees, AMC, Fund, their directors or their employees shall not be liable for any tax consequences that may arise in the event that the scheme is wound up for the reasons and in the manner provided under the Scheme Information Document & Statement of Additional Information. 2. Redemption by the Unit holder due to change in the fundamental attributes of the Scheme or due to any other reasons may entail tax consequences. 3. The Mutual Fund is not assuring any dividend nor is it assuring that it will make any dividend distributions. All dividend distributions are subject to the availability of distributable surplus and would depend on the performance of the scheme and will be at the discretion of the AMC and Trustee Company. 4. The tax benefits described in the SID are as available under the present taxation laws and are available subject to relevant condition. The information given is included only for general purpose and is based on advice received by the AMC regarding the law and practice currently in force in India and the Investors and Unit Holders should be aware that the relevant fiscal rules or their interpretation may change. As in the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of the investment in the Scheme will endure indefinitely. In view of the individual nature of tax consequences, each Investor / Unit holder is advised to consult his/her/its own professional tax advisor. 5. Trading volumes and settlement periods may inherently restrict the liquidity of the scheme s investments. In the event of an inordinately large number of redemption requests, or of a restructuring of the scheme s investment portfolio, these periods may become significant. In view of the same, the Trustees have the right in their sole discretion to limit redemptions (including suspending redemptions) under certain circumstances. 6. Different types of securities in which the Scheme/Plans would invest as given in the SID carry different levels of risk. Accordingly the Scheme s/plan s risk may increase or decrease depending upon the investment pattern. For e.g. corporate bonds carry a higher amount of risk than Government Securities. Further even among corporate bonds, bonds which are AAA rated, are comparatively less risky than bonds, which are AA rated. 8

9 III. Risks associated with investment in equity and equity related instruments Investments in equity and equity related instruments like stocks, convertibles, warrants, derivatives etc carry both systematic (macro-economic) and company-specific risks. These instruments are exposed to and can be impacted by adverse changes in interest rates, currency rates, inflation, liquidity (trading volumes and settlement) as well as company specific risks like corporate governance issues, changes in technology, financial distress etc. Equity shares are volatile and prone to price fluctuations on a daily basis. Investments in equity shares and equity related instruments involve a degree of risk and investors should not invest in the Scheme unless they can afford to take the risks. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by the Scheme. Different segments of the Indian financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances leading to delays in receipt of proceeds from sale of securities. The NAV of the Units of the Scheme can go up or down because of various factors that affect the capital markets in general. To mitigate risks associated with investments in equity and equity related instruments the AMC will ensure that the portfolio is adequately diversified. The Fund Manager will invest in companies/sectors identified through a robust in-house research process for its investments merits competitive position, earnings growth, management quality etc and will be monitored on an ongoing basis to minimize company/sector specific risks. IV. Risks associated with investments in Debt and Money Market Instruments i) Credit risk: This risk arises due to any uncertainty in counterparty's ability or willingness to meet its contractual obligations. This risk pertains to the risk of default of payment of principal and interest. Government Securities have zero credit risk while other debt instruments are rated according to the issuer's ability to meet the obligations. The AMC seek to manage credit risk by restricting investments only to investment grade securities. Regular review of the issuer profile to monitor and evaluate the credit quality of the issuer will be carried out. ii) Interest Rate risk: This risk is associated with movements in interest rate, which depend on various factors such as government borrowing, inflation, economic performance etc. The values of investments will appreciate/depreciate if the interest rates fall/rise. Interest rate risk mitigation will be through active duration management at the portfolio level through regular monitoring of the interest rate environment in the economy. iii) Liquidity risk: The liquidity of a bond may change depending on market conditions leading to changes in the liquidity premium linked to the price of the bond. At the time of selling the security, the security can become illiquid leading to loss in the value of the portfolio. The AMC will endeavour to mitigate liquidity risk by mapping investor profile and potential redemption expectations into the portfolio construction to allow the scheme to liquidate assets without significantly impacting portfolio returns. iv) Reinvestment risk: This risk arises from uncertainty in the rate at which cash flows from an investment may be reinvested. This is because the bond will pay coupons, which will have to be reinvested. The rate at which the coupons will be reinvested will depend upon prevailing market rates at the time the coupons are received. The AMC will endeavor to manage this risk by diversifying investments in instruments with appropriate maturity baskets. Since the exposure to Debt & Money Market instrumentsof the scheme will not exceed 20% of the assets, the above mentioned risks are not expected to be significant. 9

10 V. Risks associated with Short Selling and Securities Lending Short Selling: When the Fund engages in short selling, it will borrow the security from a third party with the understanding that the security will be returned at a later date as and when required by the lender. Short selling a security demonstrates a negative view on a particular security (i.e. an expectation that the stock price will fall in future). However, there is a risk that the stock price may go up contrary to expectations which will result in losses to the Scheme. The losses will be realized to the Scheme if the Scheme may be forced to buy the shares in the market at the prevailing higher market price (than the price at which sold initially) to return the security to the lender if so required by the lender Securities lending: There are risks inherent to securities lending, including the risk of failure or bankruptcy of the counter party, leading to non-compliance with the terms of the agreement by the counter party. Such failure can result in the possible loss of rights to the collateral, the inability of the counterparty to return the securities deposited by the lender and the possible loss of any corporate benefits accruing thereon. VI. Risks associated with investment in ELSS In line with the provisions stipulated under the ELSS scheme, 2005, units issued under IDBI Equity Advantage Fund will not be redeemed until the completion of 3 (three) years from the date of allotment of units. The ability of an investor to realize returns on investments in IDBI Equity Advantage Fund will consequently be restricted for the first 3 (three) years. Redemption can be made prior to the expiry of the aforesaid 3 (three) years period only in the event of the death of a Unit Holder, subject to the Units having been held for a period of 1 (one) year from the date of their allotment. VII. Risks associated with repo/reverse repo transactions in corporate bonds 1. Settlement risk - Corporate Bond Repo will be settled between two counterparties in the OTC segment unlike in the case of CBLO transactions where CCIL stands as central counterparty on all transactions (no settlement risk). Settlement risk in reverse repo will be mitigated by requiring the counterparty (entity borrowing funds from the Mutual Fund) to deliver the defined collateral in the account of the MF before the cash is lent to the counterparty. Further, the Mutual Fund will also have a limited universe of counterparties comprising of Scheduled Commercial Banks, Primary Dealers, Mutual Funds and National Financial Institutions. 2. Quality of collateral The Mutual Fund will be exposed to credit risk on the underlying collateral downward migration of rating. The Mutual Fund will mitigate this risk by a thorough in-house credit research on the quality of collateral with the objective to minimize instance of rating downgrades on collateral. The Mutual Fund will also impose adequate haircut on the collateral to cushion against any diminution in the value of the collateral. Collateral will require to be rated AAA or equivalent. The Mutual Fund will also not accept as collateral, securities issued by the counterparties themselves. 3. Liquidity of collateral In the event of default by the counterparty, the Mutual Fund would have recourse to recover its investments by selling the collateral in the market. If the underlying collateral is illiquid, then the Mutual Fund may incur an impact cost at the time of sale (lower price realization). The Mutual Fund seeks to mitigate this risk by imposing specific constraints on the collateral issuer (PSUs/ Financial Institutions etc.), tenor of the collateral (shorter maturity papers are more liquid than longer dated papers) on a case to case basis. B. REQUIREMENT OF MINIMUM INVESTORS IN THE SCHEME The Scheme shall have a minimum of 20 investors and no single investor shall account for more than 25% of the corpus of the Scheme/Plan (at portfolio level). In case the Scheme does not have a minimum of 20 investors in the stipulated period, the provisions of Regulation 39(2)(c) of the SEBI (MF) Regulations would become applicable automatically without any reference from SEBI and accordingly the Scheme shall be wound up and the units would be redeemed at applicable NAV. The two conditions mentioned above shall also be complied within each subsequent calendar quarter thereafter, on an average basis, as specified by SEBI. If there is a breach of the 25% limit by any investor over the quarter, a rebalancing period of one month would be allowed and thereafter the investor who is in breach of the 10

11 rule shall be given 15 days notice to redeem his exposure over the 25 % limit. Failure on the part of the said investor to redeem his exposure over the 25 % limit within the aforesaid 15 days would lead to automatic redemption by the Mutual Fund on the applicable Net Asset Value on the 15th day of the notice period. The Fund shall adhere to the requirements prescribed by SEBI from time to time in this regard. The 25% Exposure to the corpus of the scheme shall be calculated at the portfolio level. C. SPECIAL CONSIDERATIONS Investors should study the Scheme Information Document (SID) and Statement of Additional Information (SAI) carefully in its entirety and should not construe the contents thereof as advice relating to legal, taxation, investment or any other matters. Investors are advised to consult their legal, tax, investment and other professional advisors to determine possible legal, tax, financial or other considerations of subscribing to or redeeming Units, before making a decision to invest/redeem Units. Neither this SID and SAI nor the units have been registered in any jurisdiction. The distribution of this SID or SAI in certain jurisdictions may be restricted or totally prohibited to registration requirements and accordingly, any person who comes into possession of this SID or SAI is required to inform themselves about and to observe any such restrictions and/ or legal compliance requirements of applicable laws and Regulations of such relevant jurisdiction. Any changes in SEBI/Stock Exchange/RBI regulations and other applicable laws/regulations could have an effect on such investments and valuation thereof. The AMC, Trustee or the Mutual Fund have not authorized any person to issue any advertisement or to give any information or to make any representations, either oral or written, other than that contained in this SID or SAI or as provided by the AMC in connection with this offering. Prospective Investors are advised not to rely upon any information or representation not incorporated in the SID or SAI or as provided by the AMC as having been authorized by the Mutual Fund, the AMC or the Trustee. The tax benefits described in this Scheme Information Document (SID) and Statement of Additional Information (SAI) are as available under the present taxation laws and are available subject to relevant conditions. The information given is included only for general purpose and is based on advice received by the AMC regarding the law and practice currently in force in India and the Unit holders should be aware that the relevant fiscal rules or their interpretation may change. As is the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of an investment in the Scheme will endure indefinitely. In view of the individual nature of tax consequences, each Unit holder is advised to consult his / her own professional tax advisor. Redemption by the Unit holder due to change in the fundamental attributes of the Scheme or due to any other reasons may entail tax consequences. The Trustee, AMC, Mutual Fund, their directors or their employees shall not be liable for any such tax consequences that may arise. The Mutual Fund/AMC and its empanelled Brokers have not given and shall not give any indicative portfolio and indicative yield in any communication, in any manner whatsoever. Investors are advised not to rely on any communication regarding indicative yield/portfolio with regard to the Scheme. Unitholders applying for subscription of Units offered directly with the Fund (i.e. not routed through any distributor/agent) hereinafter referred to as 'Direct Plan' will be subject to a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid / charged under Direct Plan and therefore, shall not in any manner be construed as an investment advice offered by the Mutual Fund/AMC. The subscription of Units through Direct Plan is a facility offered to the investor only to execute his/her/their transactions at a lower expense ratio. Before making an investment decision, Investors are advised to consult their own investment and other professional advisors. Ultimate Beneficial Owner: Pursuant to guidelines on identification of Beneficial Ownership issued vide SEBI circular no. CIR/MIRSD/2/2013 dated January 24, 2013, investors (other than Individuals) are required to provide details of Ultimate Beneficial Owner(s) ( UBO ). A Beneficial owner is defined as a natural person or persons who ultimately own, control or influence a client and/or persons on whose behalf a transaction is being conducted, and includes a person who exercise ultimate effective control over a legal person or arrangement. In this regard, all categories of investors (except individuals, companies listed on a stock exchange or majority-owned subsidiary of such companies) are required to provide details about beneficial ownership for all investments. 11

12 The Fund reserves the right to reject applications/restrict further investments or seek additional information from investors who have not provided the requisite information on beneficial ownership. In the event of change in beneficial ownership, investors are requested to immediately update the details with the Fund/Registrar. The Ultimate Beneficial Owner means Natural Person, who, whether acting alone or together, or through one or more juridical person, exercises control through ownership or who ultimately has a controlling ownership interest of / entitlements to i. more than 25% of shares or capital or profits of the juridical person, where the juridical person is a company; ii. more than 15% of the capital or profits of the juridical person, where the juridical person is a partnership; or iii. more than 15% of the property or capital or profits of the juridical person, where the juridical person is a unincorporated association or body of individuals. In case of a Trust, the settler of the trust, the trustees, the protector, the beneficiaries with 15% or more of interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership is considered as the UBO. Non-Individual investors who are not the ultimate beneficial owners of the investments, must mandatorily enclose a Declaration for Ultimate Beneficial Ownership duly signed by the authorized signatory along with the purchase application for units of schemes of IDBIMF. The provisions w.r.t. Identification of UBO are not applicable to the investor or the owner of the controlling interest is a company listed on a stock exchange, or is a majority-owned subsidiary of such a company. Central Know Your Client: Individual investors investing in the mutual fund for the first time, who are not KYC compliant under the KYC Registration Agency ( KRA ) regime, shall use the new CKYC form for complying with the CKYC requirements. Individual investors, who have completed CKYC, can invest in the Mutual Fund using their 14 digit KYC Identification Number ( KIN ). In case of minors, the KIN of the guardian shall be applicable. In case, PAN of an investor is not updated in Central KYC Records Registry ( CKYCR ) system, the investor shall be required to submit a self-certified copy of his/her PAN card at the time of investment. The AMC reserves the right to reject transaction application in case the investor(s) fails to submit information and/or documentation as mentioned above. In the event of non-compliance of KYC requirements, the Trustee / AMC reserve the right to freeze the folio of the investor(s). Submission of Aadhaar Number Pursuant to requirement under Prevention of Money Laundering (Maintenance of Records) Rules, 2005, Aadhaar number/ copy or Proof of enrolment for Aadhaar is required to be submitted by/for the following: a) Where the investor is an individual, who is eligible to be enrolled for Aadhaar number, the investor is required to submit the Aadhaar number issued by UIDAI. Where the Aadhaar number has not been assigned to an investor, the investor is required to submit proof of application of enrolment for Aadhaar. If such an individual investor is not eligible to be enrolled for Aadhaar number, and in case the Permanent Account Number (PAN) is not submitted, the investor shall submit one certified copy of an officially valid document containing details of his identity and address and one recent photograph along with such other details as may be required by the Mutual Fund. The investor is required to submit PAN as defined in the Income Tax Rules, b) Where the investor is a non-individual, apart from the constitution documents, Aadhaar numbers and PANs as defined in Income-tax Rules, 1962 of managers, officers or employees or persons holding an attorney to transact on the investor s behalf is required to be submitted. Where an Aadhaar number has not been assigned, proof of application towards enrolment for Aadhaar is required to be submitted and in 12

13 case PAN is not submitted an officially valid document is required to be submitted. If a person holding an authority to transact on behalf of such an entity is not eligible to be enrolled for Aadhaar and does not submit the PAN, certified copy of an officially valid document containing details of identity, address, photograph and such other documents as prescribed is required to be submitted. Non submission/seeding of Aadhaar number may make the folio(s) inoperative. Further, Investors may kindly note that, if the name given in the application does not match the name as appearing on the PAN Card/Aadhaar card, application may be liable to get rejected or further transactions may be liable to get rejected. Purpose of usage of Aadhaar Number The purpose of collection/usage of Aadhaar number including demographic information is to comply with applicable laws/rules/regulations and provision of the said data is mandatory as per applicable laws/rules/regulations. Post obtaining the Aadhaar number, IDBI AMC/Registrar & Transfer Agent shall authenticate the same in accordance with the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, IDBI AMC/Registrar & Transfer Agent shall receive investors demographic information which shall be used only to comply with applicable laws/rules/regulations. D. DEFINITIONS "AMC" or "Asset Management Company" or "Investment Manager" Applicable NAV Business Day IDBI Asset Management Limited incorporated under the provisions of the Companies Act, 1956 and approved by Securities and Exchange Board of India to act as the Asset Management Company for the scheme of IDBI Mutual Fund. The NAV applicable for subscription or redemption or switching/transfer based on the Business Day and relevant cut-off times on which the application is accepted at Official Point of Acceptance of Transaction. A day other than (i) (ii) Saturday or Sunday; or, a day on which both the National Stock Exchange of India Limited and the Stock Exchange, Mumbai are closed; or, (iii) a day on which the Purchase/ Redemption/Switching/Transfer of Units is suspended ; or, (iv) a day on which in Mumbai, Banks and / RBI are closed for business/clearing; or, (v) (vi) a day which is a public and /or bank holiday at the Investor Service Centres of the AMC/Points of Acceptance where the application is received ; or, a day on which normal business cannot be transacted due to storms, floods, natural calamities, bandhs, strikes or such other events as the AMC may specify from time to time. Business Day does not include a day on which the Money Markets are closed or otherwise not accessible. The AMC reserves the right to declare any day as a Business day or otherwise at any of the Investor Service Centers of the AMC/Official Points of Acceptance. Business Hours Presently a.m. to 5.00 p.m. on any Business 13

14 Day or such other time as may be applicable from time to time. Custodian A person who has been granted a certificate of registration to carry on the business of custodian of securities under the Securities and Exchange Board of India (Custodian of Securities) Regulations 1996, which for the time being is Stock Holding Corporation of India Limited (SCHIL), Mumbai. Cut-off time Cut-off Timing, in relation to a prospective investor making an application to the Mutual Fund for sale or repurchase of units, shall mean, the outer limit of timing within a particular day which is relevant for determination of the NAV applicable for his transaction Consolidated Account Statement Consolidated Account Statement is a statement containing details relating to all the transactions across all mutual funds viz.purchase, redemption, switch, dividend payout,, systematic investment plan, systematic withdrawal plan, and systematic transfer plan Date of Application The date of receipt of a valid application complete in all respect for subscription / redemption of Units of this scheme by IDBI Mutual Fund at its various offices/branches or the designated centers of the Registrar. Debt Instruments Government securities, corporate debentures, bonds, promissory notes, money market instruments, pass-through certificates, asset backed securities/securitized debt and other possible similar securities. Dividend Income distributed by the Mutual Fund on the Units Equity Linked Savings Scheme Equity and Equity related instruments Entry Load Exit Load Financial Year FII or Foreign Institutional Investor Investment Management Agreement Investor Equity Linked Savings Scheme as notified by Notification no 226/2005 dated 3 rd November 2005 and issued by the Central Board of Direct Taxes, Ministry of Finance and subsequent notifications thereto, offering tax benefits under section 80 C of IT Act 1961 Include stocks and shares of companies, foreign currency convertible bonds (FCCB), warrants, convertible preference shares Entry Load means a one-time charge that the investor pays at the time of entry into the scheme. Presently, entry load cannot be charged by mutual fund schemes. A charge paid by the investor at the time of exit from the scheme. A year commencing on the 1st day of April and ending on the 31st day of March; Foreign Institutional Investor, registered with SEBI under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as amended from time to time. Investment Management Agreement dated 20 th February 2010, entered into between the Fund (acting through the Trustee) and the AMC and as amended up to date, or as may be amended from time to time. Investor means an Individual or a non-individual, as 14

15 Minor Money Market Instruments MFSS The Fund or Mutual Fund Mutual Fund Regulations / Regulations NAV NRI or Non-Resident Indian Official Points of Acceptance Person of Indian Origin Reserve Bank of India [RBI] Registrar & Transfer Agent or RTA or R&T Repo/Reverse Repo Repurchase/Redemption Scheme SAI or Statement of Additional Information Sale or Subscription permitted under SEBI (MF) Regulations to invest in mutual fund schemes, making an application for subscription or redemption of units in the Schemes of the Mutual Fund Minor means a person who has not completed the age of eighteen years under the provisions of the Indian Majority Act 1875 as amended from time to time Includes Commercial Papers, Commercial Bills, Treasury Bills, Government Securities having an unexpired maturity up to one year, call or notice money, CBLO, Repo, certificate of deposit, usance bills and any other like instruments as specified by the Reserve Bank of India from time to time. Mutual Fund Service System offered by National Stock Exchange of India Ltd IDBI Mutual Fund, a trust set up under the provisions of the Indian Trusts Act, Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended up to date, and such other regulations as may be in force from time to time. Net Asset Value of the Units of the Scheme (including Plans there under) calculated in the manner provided in this Document and as prescribed by the SEBI (Mutual Funds) Regulations, 1996 from time to time. Person resident outside India who is either a citizen of India or a Person of Indian Origin Places, as specified by AMC from time to time where application for subscription / redemption / switch will be accepted on ongoing basis. A citizen of any country other than Bangladesh or Pakistan, if (a) he at any time held an Indian passport; or (b) he or either of his parents or any of his grandparents was a citizen of India by virtue of Constitution of India or the Citizenship Act, 1955 (57 of 1955); or (c) the person is a spouse of an Indian citizen or person referred to in sub-clause (a) or (b) Reserve Bank of India established under the Reserve Bank of India Act, Karvy Computershare Pvt. Ltd. appointed as Registrar to the Scheme, or any other registrar appointed by the AMC from time to time. Purchase/Sale of a security with an agreement to sell/repurchase it on a later date Redemption of Units of the Scheme in the manner as specified in this document. IDBI Equity Advantage Fund The document issued by IDBI Mutual Fund containing details of IDBI Mutual Fund, its constitution, and certain tax, legal and general information. SAI is legally a part of the SID. Purchase of units in the Scheme in the manner as specified in this document 15

16 SID or Scheme Information Document SEBI SEBI (MF) Regulations Sponsor or Settlor Self-Certified Syndicate Bank or SCSB Switch Systematic Investment Plan (SIP) Systematic Transfer Plan (STP) Systematic Withdrawal Plan (SWP) This document issued by IDBI Mutual Fund setting forth concisely the information about offering of Units by the Scheme and terms of offer for subscription/redemption that a prospective investor ought to know before investing. Securities and Exchange Board of India established under Securities and Exchange Board of India Act, Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 for the time being in force and as amended from time to time, IDBI Bank Limited Self-Certified Syndicate Bank/ SCSB means a bank registered with SEBI to offer the facility of applying through the ASBA process. ASBAs can be accepted only by SCSBs, whose names appear in the list of SCSBs as displayed by SEBI on its website at Redemption of a unit in any scheme (including the plans / options therein) of the Mutual Fund against purchase of a unit in any other open-ended scheme (including plans / options therein) of the Mutual Fund, subject to completion of lock-in period, if any, of the units of the scheme from where the units are being switched. Facility given to the Unit holders to invest specified fixed sums in the Scheme on periodic basis by giving a single instruction Facility given to the Unit holders to transfer specified fixed sums on periodic basis from one scheme to another schemes launched by the Mutual Fund from time to time by giving a single instruction. Facility given to the Unit holders to withdraw amounts from the Scheme on periodic basis by giving a single instruction Trust Deed The Trust Deed entered into on 19 th February 2010 between the Sponsor and the Trustee, as amended up to date, or as may be amended from time to time. Trustee Company Unit Unit Capital Unit holder IDBI MF Trustee Company Limited The interest of the Unit holder which consists of each Unit representing one undivided share in the assets of the Scheme The aggregate face value of the Units issued and outstanding under the Scheme A person holding Unit(s) in the Scheme offered under this document. 16

17 IDBI Asset Management Limited confirms that a Due Diligence Certificate duly signed by the Compliance Officer of the Asset Management Company which reads as below has been has been submitted to SEBI along with a SID of Scheme at the time of filing draft offer document on May 16, 2013 E. DUE DILIGENCE CERTIFICATE It is confirmed that: i. The draft Scheme Information Document forwarded to SEBI is in accordance with the SEBI (Mutual Funds) Regulations, 1996 and the guidelines and directives issued by SEBI from time to time. ii. All legal requirements connected with the launching of the scheme as also the guidelines, instructions, etc., issued by the Government and any other competent authority in this behalf, have been duly complied with. iii. The disclosures made in the Scheme Information Document are true, fair and adequate to enable the investors to make a well informed decision regarding investment in the proposed scheme. iv. The intermediaries named in the Scheme Information Document and Statement of Additional Information is registered with SEBI and their registration is valid, as on date. For IDBI Asset Management Limited Investment Manager to IDBI Mutual Fund Sd/- Place: Mumbai Date : June 30, 2018 Compliance Officer IDBI Asset Management Limited 17